physiocrats

physiocrats (fĭzˈēəkrătsˌ) [key], school of French thinkers in the 18th cent. who evolved the first complete system of economics. They were also referred to simply as "the economists" or "the sect." The founder and leader of physiocracy was François Quesnay. His most ardent disciple, Victor de Mirabeau, was the author of the physiocratic tax doctrine; Pierre Samuel Du Pont de Nemours and Mercier de la Rivière elaborated on Quesnay's and Mirabeau's ideas. Among the antecedents of physiocracy the single-tax schemes of the marquis de Vauban and the sieur de Boisguilbert and the free-trade ideas of Vincent de Gournay may be cited. However, Quesnay's original contribution, and the basis of the doctrine, was the axiom that all wealth originated with the land and that agriculture alone could increase and multiply wealth. Industry and commerce, according to the physiocrats, were basically sterile and could not add to the wealth created by the land. They did not advocate that industry and commerce be neglected in favor of agriculture, but they tried to prove that no economy could be healthy unless agriculture were given the fullest opportunity. Agricultural methods had to be scientifically improved, and—above all—fair prices had to be maintained for agricultural production; according to Quesnay's maxim, only abundance combined with high prices could create prosperity. This could be obtained only if the "economic law," which the physiocrats envisaged as being as immutable as the law of gravity, was allowed to act untrammeled. Absolute freedom of trade was necessary to stabilize prices at a fair level, and laissez faire was to restore the economic process to its natural course, from which all further benefits would flow. To tax anything but the land was futile because only the land produced wealth and because manufacturers and traders pass their tax burden on to the farmer; only taxation at the very source of wealth was reasonable and economical—an argument not without charm for industrialists. However, the experiments of Baron Turgot and of Holy Roman Emperor Joseph II, both somewhat influenced by the physiocrats, were failures—in part because of the unfavorable conditions in which they were carried out. Although physiocracy, because of its dogmatism, has become dead doctrine, it profoundly influenced Adam Smith (who even intended to dedicate his Wealth of Nations to Quesnay) and thus the entire classical school of economists. Henry George virtually repeated the single-tax argument of Mirabeau. The physiocrats made no contribution to purely political thought except the idea of "legal despotism," by which the king and his government were to enforce the "economic laws of nature." Their fanaticism in economic doctrine was much ridiculed by their contemporaries, notably by Voltaire and by the Abbé Galiani.